Strong demand from the nation's auto and industrial sectors is propelling lubes market growth.
Demand in the world's second-largest lubricants market could as much as double by 2020, according to a report from Schmittzehe & Partners, a China-focused consulting group. The size of the domestic lubes market could therefore rival the US in size by the end of the decade and will account for almost half of the demand from the Asia-Pacific region over the next 10 years.
National usage is on track to grow by around 8-10% by the end of the year and is slated to continue to grow by the same amount through 2016. Analysts at the Beijing firm forecast total lubes sales increasing to around 23bn yuan ($3.8bn).
Although foreign lubes companies are predominant in the high-quality lubes sector, the majority market share still remains in the hands of domestic producers, who manufacture mid-to-low end lubes.
However, government incentives to reduce emissions may prompt producers to limit pollutants. According to China's 12th Five-Year Plan, the country is hoping to cut energy usage per unit of GDP by as much as 20% and aims to reduce emissions by 10% during the 2013-2017 period.